Governor Abolishes Marijuana Licensing Board: What Now?

Thursday brought big changes to the Michigan Medical Marijuana Industry as Democratic Governor Gretchen Whitmer signed an executive order which abolished the Medical Marijuana Licensing Board, the five-member panel that was granting or denying licenses. In its place, the Order establishes a new Marijuana Regulatory Agency, which the Governor and the Attorney General, Dana Nessel, hope will accelerate the review and approval process for Medical Marijuana Facilities License applications. However, the move has left questions for patients, commercial license applicants, and for the legislature.

What Impact will this have on Patients?

The goal of the order was to improve the lives of registered qualifying patients by ensuring more medical marijuana facilities are licensed in a shorter period of time. In many ways, the order was prompted by the shortage of licensed commercial grows, processors and provisioning centers across the State. The lack of licensed commercial grows and licensed processors has led to a very significant shortage in Michigan of state-licensed marijuana flower and processed goods, such as oils, vapor cartridges, balms, tinctures, and edible goods. As a result, caregiver sales to State-licensed provisioning centers, which was originally supposed to end in October of 2018, has had to be extended twice by the current Medical Marijuana Licensing Board, and may be extended again at the MMLB’s last meeting in March, before the board is abolished April 1, 2019.

Patients should know that there is not an anticipated change in the current process for renewing or obtaining registered qualifying patient and/or caregiver cards. The Department of Licensing and Regulatory Affairs has allowed, and will continue to allow, for patient/caregiver renewals and new applications online through LARA’s website. The hope is that the new Marijuana Regulatory Agency will be able to get more facilities online, allowing broader, safer and better access to medicine.

What Impact will this have for active licensing applicants?

Here, things are a bit hazier. Our best guess is that there will be few, if any changes. There was nothing in the executive order that changed the application itself, requested additional information from applicants, or imposed additional restrictions. As a result, for the time being, applicants should remain calm and carry on. There will be one more MMLB meeting in March, where the Board will grant or deny licenses. Starting April 1, 2019, the new Marijuana Regulatory Agency will begin review and approving application. The lack of clarity begins there. The new agency will have to set out a new process by which they will review the licenses and decide whether to grant or deny licenses. What will have to be clarified is whether there will be a new “Board” inside the agency that will make those determinations, or if there will be independent examiners and they will make individual assessments on each applicant’s license that is reviewed.

There is also a lack of clarity as to who will be leading this new Marijuana Regulatory Agency. To this point, Andy Brisbo has been the head of LARA’s Bureau of Marijuana Regulation. By all rights, Mr. Brisbo was appointed by former Governor Rick Snyder, and likely will be displaced from that job. The expectation of the Governor’s office will be that applicants seeking commercial licenses will have a substantially improved experience with regard to the licensing, renewal and transfer process. However, whether that really ends up being the case is yet to be seen. Expect, however, few changes to the actual process, and look for changes in efficiency and speed when it comes to licensing decisions.

What Impact does the Legislature have regarding this Executive Order?

There is, however, one major issue with the Governor’s Executive Order. The Medical Marijuana Licensing Board was directly created by passage of the Michigan Medical Marijuana Facilities’ Licensing Act (MMFLA) in 2016. Because the statute directly created the entity, the Governor’s Order to abolish the MMLB will likely face a Court challenge from the Republican-led legislature in Lansing. If a suit is initiated, it will likely begin with an injunction of the Executive Order, preserving the MMLB as status quo until the issues can be fully litigated before Michigan’s Court of Claims. Such a suit would likely garner substantial support from anti-marijuana groups, who have publicly taken the position that the new Marijuana Regulatory Agency will not inquire of licensees with the necessary scrutiny, or at least, the scrutiny with which the MMLB had reviewed applications up to this point.

The biggest takeaway is that, while the abolition of the MMLB and the creation of the Marijuana Regulatory Agency appears to be an earth-shaking change to the industry, from a higher-level view, we don’t expect that there will be substantial changes to the application, the process, or the requirements. The new Agency will have to follow and abide by the final Administrative Rules that went into effect on November 27, 2018, unless the Department determines that amendments are necessary. Seemingly, the most important difference will be seen in a reduction of backlog and an increase in the speed with which commercial licensing applicants are approved, denied or required to provide additional information.